Neglected homes in the Gilbert area

MESA — In one neighborhood here, every block has at least two for-sale signs out front. Many homes have broken porch lights and crispy brown lawns. One house has graffiti on the door.

With one of the highest foreclosure rates in the country, Arizona makes a fitting backdrop for President Obama’s new housing program, to be unveiled Wednesday in a speech at a local high school. And local residents have more hope than confidence that the $50 billion plan will be enough to end the nation’s housing recession.

“I’m hoping Obama will do good,” said Tim Iverson, who was laid off from his construction job in November.

Iverson worries about losing the house he owns jointly with his mother. Four years ago, when they refinanced their home, it was worth $212,000. Today, its value is about $160,000, and the two can barely make their $1,400 monthly mortgage payment on her Social Security check and his unemployment benefits.

But Obama’s plan is not expected to mandate massive changes to stop defaulting mortgages. Rather, it is likely to be a set of incentives designed to entice lenders to modify loans.

The sweeping measures are expected to funnel government payments to mortgage companies, which will use that money to reduce borrowers’ interest rates and therefore their monthly payments, according to several people briefed on the plan.

The guidelines of how the government would determine who would qualify were not clear Tuesday night. But the plan was expected to try to bring borrowers’ monthly payments down to around 30 percent of their pretax pay.

If lenders don’t participate, they are likely to face something they have long opposed: the gavel of a bankruptcy court judge. Obama is expected to endorse changing the law to allow bankruptcy judges to alter the terms of a borrower’s mortgage.

The mortgage industry argues this added risk will lead to higher interest rates.

However, Obama still will face a daunting task — explaining to Americans who behaved responsibly during the housing boom that their taxes should subsidize those who took on too much risk.

Despite the inevitable backlash, consumer advocates and some in the real estate industry argue that it’s still in everyone’s best interest to avoid as many foreclosures as possible because they drag down the value of neighboring properties.

“It’s not a matter of fairness,” said Mark Goldman, a mortgage broker who lectures on real estate at San Diego State University. “It’s a matter of protecting the value of your property.”

White House press secretary Robert Gibbs declined to comment on the administration’s plans on Tuesday, other than to say that the housing crisis is “a problem that not only affects the individual homeowner and their family, but oftentimes has a direct impact to home values in the neighborhood.”

A Democrat familiar with the plan said Tuesday night that it will “enable millions of Americans to refinance or modify their mortgages to get their monthly payments down, giving them much needed relief in this time of economic distress and preventing millions of avoidable foreclosures.”

The scope of the problem is especially evident in Arizona. Nearly 117,000 properties in the state received a foreclosure filing last year, up 200 percent from a year earlier, according to RealtyTrac Inc., a foreclosure listing firm. Arizona had the third-highest foreclosure rate in the nation last year — behind Nevada and Florida.

Sorting out who will qualify will be a challenge. But any foreclosure relief plan is not expected to help those who bought homes as investments. And that’s a big number.

In Arizona, nearly 15 percent of home loans made in 2006 were made to borrowers who did not occupy their homes, compared with more than 20 percent in Florida and nearly 18 percent in Nevada, according to the Mortgage Bankers Association.

Meanwhile, the source of new foreclosures is rapidly shifting from loans resetting at dramatically higher interest rates to broader economic pain.

“It’s very difficult to come up with any kind of loan modification plan for someone without a job,” said Jay Brinkmann, chief economist with the Mortgage Bankers Association.

With companies laying off workers by the thousands and housing prices having already declined by half in some places, the housing correction is already well under way, many analysts say, and any action by the government is likely to have modest results.

“There is no silver bullet to fix any of it,” said Paul Miller, a banking analyst with Friedman, Billings, Ramsey & Co., who recently returned from a tour of foreclosure-stricken South Florida. “It’s going to take time, that’s it.”

More than 2.3 million American homeowners faced foreclosure proceedings last year, an 81 percent increase from 2007, according to RealtyTrac. The rate is only expected to increase this year.

Credit Suisse said late last year that there could be as many as 10 million foreclosures over the next four years, depending on how far the economy falls.

And of the nearly 52 million U.S. homeowners with a mortgages, about 13.8 million, or nearly 27 percent, owe more on their mortgage than their house is now worth, according to Moody’s Economy.com

Linda Real, who has owned the same well-kept house in Mesa for 35 years, noticed this past summer that foreclosures were rising around the neighborhood. Two years ago, when the market was still up, she had considered selling.

“We could have sold it for double for what we could sell it for now,” said Real, who hopes that Obama’s plan will turn around her neighborhood and bring up property values. “I don’t think there is a perfect plan, but it has got to start somewhere.”

Four Democratic U.S. House members are calling for the new Attorney General and Homeland Security Secretary to investigate allegations of racial profiling against Maricopa County Sheriff Joe Arpaio.

“Sheriff Arpaio has repeatedly demonstrated disregard for the rights of Hispanics in the Phoenix metropolitan area,” said a press release issued by U.S. Rep. John Conyers Jr., chairman of the U.S. House Judiciary Committee, and three other lawmakers. “Under the guise of immigration enforcement, his staff has conducted raids in residential neighborhoods in a manner condemned by the community as racial profiling.

“Racial profiling and segregation are simply not acceptable,” Conyers, from Michigan, is quoted as saying in the release. “Media stunts and braggadocio are no substitute for fair and effective law enforcement.”

Arpaio strongly denied that his deputies have used racial profiling. “We’re doing the right thing,” the sheriff said. “If I was worried, with all the allegations, why would I keep doing it? I’m not stupid, having worked for the feds for 30 years.”

Arpaio compared the lawmakers’ request to similar ones made within the past year from Phoenix Mayor Phil Gordon and immigrant advocacy groups. A federal investigation hasn’t materialized, which Arpaio said made him confident federal authorities wouldn’t find any violations in his immigration-enforcement efforts. He said he anticipated new “calls for investigation” after President Obama was elected in November.

The other House members calling for the probe are Immigration Subcommittee Chairwoman Zoe Lofgren, D-Calif., Immigration Subcommitte Chairwoman; Jerrold Nadler, D-N.Y., Constitution Subcommittee Chairman, and Bobby Scott, D-Va., Crime Subcommittee Chairman. They and Conyers sent a letter to Attorney General Eric Holder and Homeland Security Secretary Janet Napolitano, former governor of Arizona, requesting the following:

That authorities investigate whether civil action should be taken against Arpaio’s office; and that Arpaio be forced to conform to his agreement with federal authorities that allows deputies to enforce immigration laws. “We urge that such an agreement be terminated if the situation cannot be remedied,” their letter states.

Arpaio has stirred controversy over the past few years by sending deputies into neighborhoods to conduct crime suppression operations that critics contend are really aimed at arresting illegal immigrants by targeting Latinos.

A series of recent worksite raids by the sheriff’s office have also drawn similar complaints of racial profiling and excessive use of force.

U.S. Immigration and Customs Enforcement officials have said Arpaio is following the agreement he signed with them allowing enforcement of federal immigration laws.

After hitting four states in four days, Obama is going back on the road next week to convince Americans his plan will get the job done.

WASHINGTON – President Obama is heading to Arizona to promote his economic stimulus plan.

After hitting four states in four days, Obama is going back on the road next week to convince Americans his plan will get the job done.

The president is planning stops in Denver and Phoenix on Tuesday and Wednesday. That comes on top of a whirlwind of travel this week: Obama was scheduled to be in Peoria, Ill., Thursday afternoon after visiting Indiana, Florida and Virginia earlier.

With next week’s travel, Obama aims to continue promoting his $790 billion plan to create jobs and pump up consumer activity through spending programs and tax relief.

A compromise has been reached on a package among White House and congressional negotiators, and final votes in the House and Senate were expected Friday. Once passed, it would go to Obama for his signature.

Obama also is expected to talk about his administration’s separate plan, announced this week, for using the rest of the $700 billion financial rescue package that Congress approved last year.

Obama has said he plans to make the announcement himself of how he intends to help people in danger of losing their homes to foreclosure. That announcement could come during his travels, or wait until he is back at the White House.

Another decision still being made by the White House: where, when and how Obama would sign the stimulus bill into law. Obama aides want to make a splash with the event, either by making it as high-profile as possible at the White House, or staging a ceremony on the road.

While Sen. John McCain will no longer hold up the nomination of William Lynn as deputy defense secretary, Lynn's appointment could still face trouble in the Senate.

WASHINGTON – Sen. John McCain, the Senate Armed Services Committee’s top Republican, will no longer hold up the nomination of former Raytheon lobbyist William Lynn to the No. 2 job at the Pentagon, according to the senator’s spokeswoman.

McCain’s decision removes a major roadblock for Lynn’s appointment, which violates President Barack Obama’s own rule against hiring lobbyists to staff the federal government. The Obama administration issued a waiver on Lynn’s behalf because officials said he represented a rare exception.

A vote on Lynn’s appointment by the Armed Services Committee had been put on hold pending McCain’s inquiry into Lynn’s lobbying work. Until July, Lynn was a registered lobbyist with Raytheon Co., a top military contractor that attracted more than $18 billion in government business in 2007.

McCain spokeswoman Brooke Buchanan confirmed Monday by e-mail that the senator will allow the nomination to proceed after having received from Lynn more specifics on his lobbying work for Raytheon. She declined to say whether McCain planned to vote for Lynn.

“Mr. Lynn addressed Senator McCain’s concerns adequately and intends to move forward with the nomination process,” she wrote.

In a Jan. 30 letter, obtained by The Associated Press, Lynn told McCain he lobbied Congress in 2007 and 2008 on “only a handful” of programs: the DDG-1000 surface combatant, the Advanced Medium-Range Air-to-Air Missile, the F-15 airborne radar, the Army Patriot “Pure Fleet” program, the Future Imagery Architecture and the Multiple Kill Vehicle.

He said he lobbied the Defense Department on only one program — the Multiple Kill Vehicle, a technology designed to counter ballistic missiles.

While McCain may be appeased, Lynn’s appointment could still face trouble in the Senate. Last week, Sen. Charles Grassley, R-Iowa, accused him of shoddy budget practices while serving as the department’s chief financial officer during the Clinton administration.

Grassley also opposed Lynn’s lobbying ties and demanded more information.

In conjunction with his appointment, Lynn was granted a waiver from Obama’s own requirement that individuals must wait two years before working for the agencies they lobbied and not involve themselves in issues related to their former employers.

White House press secretary Robert Gibbs told reporters that even the toughest rules require “reasonable exceptions” and that the waiver provisions were added to allow “uniquely qualified individuals” like Lynn serve.

Last week in congressional testimony, Defense Secretary Robert Gates warned against implementing ethics requirements that are so strict no one can meet them. Gates asked that Lynn be appointed as his deputy.

To meet separate ethics requirements stipulated by the Senate Armed Services Committee, Lynn agreed to sell his Raytheon stock and other defense holdings within 90 days of his appointment. Financial disclosure documents show Lynn owns Raytheon stock valued up to $1 million that would vest in February.

But instead of agreeing to step back from all matters related to his former employer, Lynn for one year would be required to seek written approval from Pentagon lawyers when “circumstances would cause a reasonable person with knowledge of the relevant facts to question my impartiality,” according to a letter from Lynn to McCain.

Sen. John McCain

WASHINGTON – Sen. John McCain said Sunday the confirmation of President Barack Obama’s choice for deputy defense secretary should move forward despite concerns about the nominee’s role as a former defense lobbyist.

The Obama administration considers William J. Lynn, Obama’s pick for the No. 2 job at the Pentagon, to be an exception from its own ban on hiring lobbyists. As a lobbyist for Raytheon, one of the military’s top contractors, Lynn worked on matters with far reach across the Pentagon.

White House press secretary Robert Gibbs has said that even the toughest rules require “reasonable exceptions” for “uniquely qualified individuals.”

“I don’t like it,” said McCain, the Arizona senator and Obama’s Republican competitor in the 2008 presidential race. “I think it’s a bit disingenuous to announce strict rules and then nominate someone with a waiver from the rules that you just announced in one of the most important jobs in Washington.”

But McCain, the top Republican on the Senate Armed Services Committee, added: “I have asked to see which areas that Mr. Lynn will be recused from. But I think we need to probably move forward with his — with his nomination.”

The Pentagon announced Friday that Lynn will sell his stock in Raytheon. But he won’t be forced to step back from decisions related to his former employer. Instead, his dealings at the Defense Department will be subject to ethics reviews for one year, the Pentagon said.

The administration wants to waive Obama’s ethics pledge for Lynn in two specific areas: a two-year prohibition on employees from participating in decisions related to their former employers, and a more specific section banning individuals from taking jobs in the agencies they recently lobbied.

“The fact is that there are a lot of talented people who have been in the lobbying business that could serve the country well, and I guess every rule has a goal, and that’s to show the government’s going to be run differently,” said Sen. Lindsey Graham, R-S.C., and a committee member.

“And Mr. Lynn has a resume that shows he could serve in a very important role now, so it’s just the reality of policies versus governance,” Graham said, adding that he applauds Obama “for trying to change the culture of government.”

Lynn “is very good at what he would be assigned to do, so I’m willing to let it go if he’s willing to make the waiver,” Graham said.

McCain appeared on “Fox News Sunday,” while Graham spoke on CNN’s “State of the Union.”

WASHINGTON – The Senate on Tuesday swiftly approved six members of President Barack Obama’s Cabinet, but put off for a day the vote on his choice to be secretary of state, Hillary Clinton.

The Senate confirmed all six with a single voice vote a little more than three hours after Obama took the oath of office to become the 44th president.

But Democratic hopes to add Clinton to that list were sidetracked when one senator, Republican John Cornyn of Texas, objected to the unanimous vote.

Cornyn said he still had concerns about foreign donations to the foundation headed by Clinton’s husband, former President Bill Clinton.

Those confirmed were Steven Chu to be energy secretary, Arne Duncan at education, Janet Napolitano for homeland security, Eric Shinseki to head veterans affairs, Ken Salazar for interior and Tom Vilsack to lead the department of agriculture.

The Senate also approved Peter Orszag, recently the director of the Congressional Budget Office, to head the White House’s Office of Management and Budget.

Obama signed nominating papers for his Cabinet choices about an hour after he took the oath.

Senate leaders agreed to have a roll call vote on Clinton on Wednesday after three hours of debate. Jim Manley, spokesman for Senate Majority Leader Harry Reid, predicted that “she will receive overwhelming bipartisan support at that time.”

The Wednesday vote became necessary when Cornyn objected to the voice vote. In the Senate, a single senator can block measures from being approved by voice.

He said he wanted “a full and open debate and an up-or-down vote on Sen. Clinton’s nomination.” He said important questions remain unanswered concerning the foundation headed by former President Bill Clinton “and its acceptance of donations from foreign entities. Transparency transcends partisan politics and the American people deserve to know more.”

Cornyn’s spokesman Kevin McLaughlin said the senator is not trying to block her confirmation, but is seeking more debate on the donation issue.

Several Republicans raised questions at Clinton’s confirmation hearing about possible conflicts of interest from Bill Clinton’s fundraising work and his acceptance of large donations from foreign countries and companies.

Sen. Richard Lugar of Indiana, top Republican on the Foreign Relations Committee, urged Clinton to improve transparency in her husband’s fundraising activities. He said the former president’s foundation should stop taking foreign contributions while Clinton serves as secretary of state. McLaughlin said Cornyn has asked Clinton to take similar steps.

In her testimony, Clinton said the foundation would provide a clearer picture of its annual donations.

Also left unconfirmed were several other top members of Obama’s cabinet. Timothy Geithner, the nominee to head the treasury department, faces the Finance Committee Wednesday, where he will have to explain his initial failure to pay payroll taxes he owed while working for the International Monetary Fund.

The Judiciary Committee is expected to vote as early as Wednesday on Eric Holder to be attorney general. Also still in the confirmation process is former Senate Democratic leader Tom Daschle, Obama’s pick to head health and human services and spearhead his efforts to reform health care.

Robert Gates, who has served as defense secretary under President George W. Bush, will continue in that position in the Obama administration.

The Senate traditionally moves quickly to affirm the new president’s Cabinet.

Eight years ago the Senate approved seven members of President George W. Bush’s Cabinet, including Colin Powell to be secretary of state.

On Bill Clinton’s first day in office in 1993, the Senate gave the go-ahead for the secretaries of state, defense and treasury. They next day it approved eight more Cabinet officers.

President-elect Barack Obama welcomes Sen. John McCain (R-Ariz.) to the stage at a dinner on Monday in Washington.

WASHINGTON – President-elect Barack Obama is calling his former rival John McCain an American hero who set a standard of patriotism and bipartisanship for all to follow.

Obama praised McCain at a Monday night dinner in Washington honoring the Republican senator from Arizona whom Obama defeated in the November election.

Obama put their campaign criticisms behind them and called for help “in making this bipartisan dinner not just an inaugural tradition, but a new way of doing the people’s business in this city.”

Two of former U.S. Rep. Rick Renzi’s co-defendants won’t have to stand trial together because they’re accused of unrelated crimes, a federal magistrate has ruled.

U.S. Magistrate Bernardo Velasco’s ruling found that James Sandlin doesn’t have to stand trial alongside Andrew Beardall.

Sandlin, a real estate investor and a one-time business associate of Renzi’s, whose term as a Republican congressman for Arizona has just ended, is charged with conspiring with Renzi in a land swap deal to benefit both men. Beardall, an attorney who was president and general counsel of an insurance company that Renzi owned, is accused of conspiring with Renzi to commit insurance fraud.

In the ruling issued last week, Velasco found that the insurance fraud counts were not related to the alleged land exchange offenses.

Only Renzi had a relationship to each of the co-defendants in the separate land swap and insurance fraud cases spelled out by government prosecutors. Velasco granted Sandlin’s motion to separate the co-defendants because Sandlin and Beardall weren’t working in concert and there was no indication that the co-defendants knew everything about both alleged conspiracies.

The ruling means the possibility of at least two trials — and potentially three or four — perhaps one for each defendant.

Renzi is named in all but one of 44 counts, on charges including conspiracy, wire fraud, money laundering, insurance fraud, extortion and racketeering.

A third co-defendant, Dwayne Lequire, an accountant at Renzi’s insurance company, was added when a superseding indictment was handed up in November.

That indictment will bring new motions and more arguments, including one over whether the racketeering count will enable the government to try multiple defendants.

Renzi, Beardall, Sandlin and Lequire all have pleaded not guilty.

Renzi, 50, initially was indicted last February. The charges came after months of speculation over his future after federal investigators began looking into the circumstances of a federal land swap that also involved the purchase of 480 acres near the San Pedro River in Cochise County owned by Sandlin. Renzi did not seek a fourth term last year.

Besides the land swap allegations, the indictment also alleged that he siphoned off funds from his family insurance firm to fund his first election campaign.

In last week’s ruling, Velasco wrote that it was “disingenuous for the government to argue that all of the offenses in the indictment are connected” through Renzi’s insurance company.

Velasco did not rule on Beardall’s request in the same motion to separate his trial from Renzi’s.

Beardall’s lawyers contended that a joint trial would cause Beardall “extreme prejudice,” unfairly tainting him because of a large volume of evidence concerning the alleged land exchange scheme that Beardall had no involvement with.

Velasco also must examine an attorney-client privilege issue concerning Beardall and Renzi. Beardall has claimed that if the two men were tried together, Renzi could claim an attorney-client relationship that would preclude Beardall from presenting evidence on his own behalf concerning his state of mind in making allegedly false statements.

Separating the two defendants, Velasco’s motion said, would be both appropriate and necessary “to resolve the conflict between Beardall’s right to present a defense and Renzi’s right not to have privileged communications introduced against him at trial.”

Several other issues remain, including whether to dismiss the insurance fraud counts and constitutional challenges Renzi has raised.

Lawyers for Renzi, who represented Arizona’s 1st Congressional District for three terms, argued in December before Velasco that the government’s investigation violated Renzi’s rights under the “speech or debate” clause of the U.S. Constitution granting members of Congress protection for their legislative acts.

Meanwhile, on Monday U.S. District Judge David Bury reset the trial’s start from March 24 to June 2.

Gov. Janet Napolitano, seen here giving her State of the State address on Monday in Phoenix, acknowledged all parts of Arizona's security plan hadn't been completed but said her experiences would help her meet her federal responsibilities.

PHOENIX — President-elect Barack Obama’s choice for homeland security chief blames budget problems and the difficulty coordinating agencies in Arizona, where she has been governor, for failing to complete key provisions of a detailed security plan for her own state.

Gov. Janet Napolitano put together the plan six years ago to improve Arizona’s ability to respond to emergencies, detect and prevent terrorist attacks and secure Arizona’s border with Mexico. But some key provisions remain incomplete. Firefighters, paramedics and other first responders at disaster scenes still can’t always communicate by radio without calling in special equipment, and criminal records still aren’t fully available electronically.

Napolitano would face challenges on an even larger scale at the Homeland Security Department. Unable to accomplish all her state’s homeland security goals, she goes before Congress with an obvious question on the table: Can she do better in Washington? Her Senate confirmation hearing is scheduled for Thursday, just days before Obama’s inauguration.

The Homeland Security Department she’s been tapped to run — the sprawling agency responsible for hurricane aid, airport security, border patrols, cyber security, the Coast Guard and more — is among the most expansive bureaucracies in Washington.

Napolitano said in an interview that the state had made “good progress.” She acknowledged all parts of the security plan hadn’t been completed but said her experiences would help her meet her federal responsibilities.

Her critics weren’t so generous.

“We’re probably doing a C-plus,” said Jeff Hatch-Miller, a former Republican lawmaker in Arizona who worked on homeland security. “I don’t think we’re failing.” He said Arizona didn’t spend enough money on homeland security, especially on efforts to fix communications problems and detect diseases.

Napolitano announced her state homeland security plan, “Securing Arizona,” shortly after she became governor in 2003.

Key provisions included:

• Appointing a new state homeland security director.

• Establishing a statewide, interoperable radio system for emergency workers.

• Launching a new “211″ statewide telephone system with community and health information.

• Integrating information systems used by police, courts and prisons to share criminal records electronically and help identify emerging terror trends.

• Setting up a statewide disease surveillance system with doctors, hospitals and others to detect signs of biological or chemical attacks.

• Obtaining more federal money to help protect Arizona’s southern border.

Most parts of the Arizona plan are completed. The state created a homeland security agency, opened a counterterrorism center to collect and share intelligence, bolstered disease surveillance systems, appointed a border liaison officer and updated its emergency plan.

Its counterterrorism center, which opened in October 2004, was among the initial handful of “fusion centers” opened by most states nationwide.

It allows state and local employees to share information with FBI agents and analysts, who work in the same building but behind locked doors separating them from the state and local government workers who don’t have security clearances.

“It helps us to identify patterns and areas of concerns,” said Lori Norris, a center watch commander and state Department of Public Safety lieutenant.

But major provisions of Napolitano’s plan aren’t finished. There are gaps getting high-tech equipment into the hands of law enforcement officers and making individuals’ criminal records available electronically, said John Blackburn Jr., director of the Arizona Criminal Justice Commission.

And Arizona gulped over a $250 million to $350 million price tag to overhaul its microwave communications system, to allow seamless radio calls among emergency workers. It’s now using mobile vans to patch together transmissions from different agencies responding to a terrorist strike or disaster, and new equipment has been installed at sheriff’s departments across the state to allow interoperability.

Phoenix and other metro areas are covered, but not rural parts of the state, said Chris Cummiskey, a Napolitano appointee who heads the state Government Information Technology Agency.

“We’re making headway,” Cummiskey said.

Arizona has a 211 system that is scaled back from what it had planned. It includes a Web site as well as a phone center that can be activated to distribute terror warnings and recommendations, along with information about social services and non-terrorism emergencies.

But a network of regional call centers never got off the ground. Local governments balked at paying $5 million annually to operate regional offices around Arizona, and $3 million that the state set aside for the program instead went to help prevent it from falling into debt.

Arizona’s director for homeland security, Leesa Morrison, said the state is almost finished updating its emergency plan and plans a comprehensive study to assess potential terrorism targets to help shape spending priorities.

“My vision is that we will become one of the first states in the nation to complete a target capability assessment of this magnitude,” Morrison said.

———

On the Web

Arizona Counter Terrorism Information Center:

http://cid.dps.state.az.us

Arizona Department of Homeland Security:

www.azdohs.gov

PALM SPRINGS, Calif. – Leaders of California’s politically powerful Indian tribes are pressing the incoming Obama administration to appoint more American Indians to the federal judiciary.

Nearly 900 judges sit on the federal bench throughout the country, but government records show only one claims American Indian ancestry: Frank Howell Seay, a senior district judge in Oklahoma.

In a meeting in Washington last month, tribal leaders urged President-elect Barack Obama’s transition team to elevate more Indians to the federal courts and to move quickly on appointments at the U.S. Bureau of Indian Affairs.

“We need federal Indian judges,” Richard Milanovich, chairman of the Agua Caliente Band of Cahuilla Indians, said Wednesday at an annual Indian gambling conference. “There are very qualified Indian attorneys who could fill those jobs.”

“I’m very optimistic about our new leadership, since he’s our first president to actually include tribal leaders in his considerations,” Milanovich said. “I was very much encouraged by the fact the transition team took the time to meet with tribal leaders.”

That was echoed by Lee Acebedo, executive director of the California Nations Indian Gaming Association, who said the federal bench needs more judges well versed in Indian issues.

“Frequently we find judges and people in administrative positions who don’t understand tribal sovereignty,” Acebedo said in an interview.

Obama spokesman Tommy Vietor declined to comment.

The popularity of Indian casinos across California has transformed some tribes into wealthy corporations, and with it has come broad influence in politics. The tribes rank among the state’s biggest donors to campaigns, and Milanovich’s tribe has given the maximum $50,000 to Obama’s inaugural committee.

Milanovich’s comments came at a sparsely attended Western Indian Gaming Conference, where the mood was mostly glum over the sour national economy, which has pinched casino business.

An environmental group plans to sue the U.S. Fish & Wildlife Service over rejection last week of federal protection for eight species, including one in Arizona that was thought to be extinct but rediscovered in 2005, a manager for the group said Monday.

The species were among 275 the service rejected Jan. 6, citing a lack of scientific information on most. Of the 275 species rejected in the Southwest, 86 are in Arizona. The 275 species were among 475 in a listing petition filed in 2006.

Denver-based WildEarth Guardians asked last summer for emergency protection for the eight species, said Nicole Rosmarino, the environmental group’s Wildlife Program director.

The group has already given more scientific information on the eight species and will challenge last week’s decision, Rosmarino said.

“We will be sending that this week,” she said.

One of the eight species is Fallceon eatoni, a mayfly that was thought to be extinct because it hadn’t been seen since 1934. It was originally native to New Mexico and Arizona.

“It was recently rediscovered in Arizona, in 2005, in the Salt River Canyon,” Rosmarino said.

The agency chose not to complete yearlong assessments on 270 of the 275 based on lack of scientific information.

“The information submitted for the majority of the 270 species in this petition only contained taxonomic information, including the Latin name, a physical description of the plant or animal and known locations,” according to a Game & Fish news release.

The agency is still accepting scientific information on the 270 species for possible future reviews.

Examples of the 270 rejected include the Rincon talussnail, Sonoran snaggletooth and Santa Rita Rabdotus (all snails) – all found in Arizona.

Fish & Wildlife rejected the remaining five species as ineligible for protection – one, the Arizona agave, because it was removed from the list in 2006, according to the finding published in the Federal Register on Jan. 6. One species was proposed for listing under two names, one of which was removed, and three others are already been proposed in a different petition.

The initial 475 species filed in 2006 was based on information from Virgina-based NatureServe, a non-profit group that maintains an endangered species database.

The remaining 200 species of the 475 will be addressed later, the Federal Register entry said.

“When funds become available, we will continue our review of the remaining petitioned species . . . and publish one or more findings for those species,” the Federal Register entry said.

Cindy Reilly (center) sets the dinner table for her children Isabella (left), 7, Sierra, 4, and her husband Mike in the kitchen of their home in Nipomo, Calif. The family has decided to escape California's high cost of living by moving to Colorado in February.

LOS ANGELES – Mike Reilly spent his lifetime chasing the California dream. This year he’s going to look for it in Colorado.

With a house purchase near Denver in the works, the 38-year-old engineering contractor plans to move his family 1,200 miles away from his home state’s lemon groves, sunshine and beaches. For him, years of rising taxes, dead-end schools, unchecked illegal immigration and clogged traffic have robbed the Golden State of its allure.

Is there something left of the California dream?

“If you are a Hollywood actor,” Reilly says, “but not for us.”

Since the days of the Gold Rush, California has represented the Promised Land, an image celebrated in the songs of the Beach Boys and embodied by Silicon Valley’s instant millionaires and the young men and women who achieve stardom in Hollywood.

But for many California families last year, tomorrow started somewhere else.

The number of people leaving California for another state outstripped the number moving in from another state during the year ending on July 1, 2008. California lost a net total of 144,000 people during that period — more than any other state, according to census estimates. That is about equal to the population of Syracuse, N.Y.

The state with the next-highest net loss through migration between states was New York, which lost about 125,000 residents.

California’s loss is extremely small in a state of 38 million. And, in fact, the state’s population continues to increase overall because of births and immigration, legal and illegal. But it is the fourth consecutive year that more residents decamped from California for other states than arrived here from within the U.S.

A losing streak that long hasn’t happened in California since the recession of the early 1990s, when departures outstripped arrivals from other states by 362,000 in 1994 alone.

In part because of the boom in population in other Western states, California could lose a congressional seat for the first time in its history.

Why are so many looking for an exit?

Among other things: California’s unemployment rate hit 8.4 percent in November, the third-highest in the nation, and it is expected to get worse. A record 236,000 foreclosures are projected for 2008, more than the prior nine years combined, according to research firm MDA DataQuick. Personal income was about flat last year.

With state government facing a $41.6 billion budget hole over 18 months, residents are bracing for higher taxes, cuts in education and postponed tax rebates. A multibillion-dollar plan to remake downtown Los Angeles has stalled, and office vacancy rates there and in San Diego and San Jose surpass the 10.2 percent national average.

Median housing prices have nose-dived one-third from a 2006 peak, but many homes are still out of reach for middle-class families. Some small towns are on the brink of bankruptcy. Normally recession-proof Hollywood has been hit by layoffs.

“You see wages go down and the cost of living go up,” Reilly says. His property taxes will be $1,300 in Colorado, down from $4,300 on his three-bedroom house in Nipomo, about 80 miles up the coast from Santa Barbara.

California’s obituary has been written before — “California: The Endangered Dream” was the title of a 1991 Time magazine cover story. The Golden State and its huge economy — by itself, the eighth-largest in the world — have shown resilience, weathering the aerospace bust, the dot-com crash and an energy crunch in recent years.

But this time, the news just keeps getting worse.

A state board halted lending for about 2,000 public works projects in California worth more than $16 billion because the state could not afford them. A report by Sen. Barbara Boxer, D-Calif., last month said the state lost 100,000 jobs in the last year and the erosion of home prices eliminated over $1 trillion in wealth.

“I don’t think the California dream, per se, is over. It has become and will continue to become grittier,” says New America Foundation senior fellow Gregory Rodriguez. “Now, perhaps, we have to reassess the California of our imagination.”

Gov. Arnold Schwarzenegger is among those who say the state needs to create itself anew, rebuilding roads, schools and transit.

“We’ve lived off the investments our parents made in the ’50s and ’60s for a long time,” says Tim Hodson, director of the Center for California Studies at California State University, Sacramento. “We’re somewhat in the position of a Rust Belt state in the 1970s.”

Financial adviser Barry Hartz lived in California for 60 years and once ran for state Assembly before relocating with his wife last year to Colorado Springs, Colo., where his son’s family had moved.

“The saddest thing I saw was the escalation of home prices to the point our kids, when they got married, could not live in the community where they lived and grew up,” Hartz says. “Some people call that progress.”

WASHINGTON – The Supreme Court has agreed to decide whether Arizona is providing enough money for programs for students who are learning the English language.

The justices say Friday that they will consider overturning lower court rulings that the state has failed to provide adequate funding for programs for students who are learning English and that the failure violates a federal law requiring equal opportunities in education.

Arizona’s state school superintendent and the leaders of the state House and Senate urged the court to hear their appeal, arguing that a 2006 law essentially eliminated long-standing funding inequities.

The state itself asked the court to stay out of the dispute, saying Arizona would be better off working to comply with the lower court judgments.

The cases are Horne v. Flores, 08-289, and speaker of the Arizona House of Representatives v. Flores, 08-294.

Last-minute rules are fueling concerns from businesses

WASHINGTON – The Department of Homeland Security will collect millions of new electronic records about private planes, imported cargo, foreign visitors and federal contractors as part of an array of controversial last-minute security policies imposed by the Bush administration.

Businesses say the policies are costly, and worry that sensitive information could be released if a database is lost or stolen. Some charge the Homeland Security Department with rushing to impose policies and ignoring business concerns.

“Industry keeps reaching out to (them), but our comments are continually dismissed,” said Catherine Robinson, director of high-tech trade policy for the National Association of Manufacturers trade group, which represents 14,000 companies.

Homeland Security spokeswoman Amy Kudwa said that by collecting information electronically, the department can run security checks more quickly than with paper forms, and could flag people or cargo that should be barred from the United States. Some changes have been in the works for more than a year.

So far there’s been a lot of opposition. The U.S. Chamber of Commerce and four other groups have sued to block a policy requiring federal contractors to send information about employees electronically to the department to verify that they can work legally in the United States.

The policy takes effect Jan. 15 and applies to employees working on a federal contract worth more than $100,000.

Businesses worry that the department’s online system, which some employers now use voluntarily, incorrectly lists legal citizens as ineligible to work, chamber vice president Randel Johnson said. The chamber wanted more tests before 170,000 federal contractors were forced to use the system. But, Johnson said, “DHS simply has more faith in the system than a lot of our members.”

On Tuesday, Ed Bolen, CEO of the National Business Aviation Association, criticized as “overly broad” several proposed security rules for 15,000 private jets, such as barring dangerous items from the passenger cabin. The rules, which aren’t final yet, would require private-jet passengers to be checked against terrorist watch lists.

Companies fear that their business strategies could be compromised if their flight information leaks out, association vice president Douglas Carr said. “I don’t think there’s a clear, demonstrated ability to secure this data,” Carr said.

Kudwa, the Homeland Security spokeswoman, said disputes are inevitable. She said, however, that the government routinely listens to business concerns about security.

The department has eased some proposals. Dozens of companies and associations protested a plan that would require them starting Jan. 26 to submit detailed information about imported cargo 24 hours before it is loaded on a ship in a foreign port.

Robinson of the manufacturers association said the administration agreed to ease some of the data requirements and to reconsider the policy after June 1.

Head of homeland security committee calls her superb choice

Napolitano

WASHINGTON – Arizona Gov. Janet Napolitano, tapped by President-elect Barack Obama to lead the Department of Homeland Security, is expected to move quickly and smoothly through the Senate confirmation process beginning next week.

But if she’s confirmed, the two-term governor and former federal prosecutor faces politically charged issues, from how to handle controversial raids conducted by the Immigration and Customs Enforcement agency to new intelligence that concludes terrorists probably will acquire mass destruction weapons.

Napolitano met for almost an hour Tuesday with Sen. Joseph Lieberman, I-Conn., chairman of the Homeland Security and Governmental Affairs Committee that will handle her confirmation hearing. Lieberman later pronounced Napolitano a “superb” nominee and stressed the importance of moving quickly on her confirmation.

Napolitano’s confirmation hearing is scheduled for Jan. 15. Lieberman said he hopes for a full Senate confirmation vote well before the end of the month.

If confirmed, Napolitano will be the nation’s third homeland security secretary.

“The secretary of homeland security, in current reality, is as critically important to our national security as the secretary of defense and the secretary of state, and in some ways, more urgent,” Lieberman said following Tuesday’s meeting with Napolitano.

If the past is any indicator, Napolitano could face an early test. President Bush was in office less than eight months before the Sept. 11, 2001, terrorist attacks. Shortly after President Bill Clinton took office in 1993, terrorists bombed the World Trade Center.

The massive 22-agency Homeland Security Department was hastily created in the wake of the 2001 attacks to better coordinate the national response to threats and disasters.

Like most Cabinet nominees, Napolitano has kept a low profile. She avoided reporters as she left Tuesday’s Capitol Hill meetings.

But that ends next week when she’ll tell lawmakers how she would deal with some of the thorniest issues facing the nation, including:

• Immigration. The border-state governor has won praise from lawmakers for what they see as her tough but human approach to immigration.

But Napolitano has taken positions as a governor that she might have to rethink as a national policymaker.

She criticized the decision to pull back the National Guard from the U.S.-Mexico border before some fence work was done. She also opposed the government’s Real ID mandate for biometric identification cards, saying it would unfairly shift costs onto border states like Arizona.

The controversial raids by ICE agents, which critics call too aggressive, are sure to come up during her confirmation hearing.

Obama apparently doesn’t like the way ICE is enforcing policy. In a speech to the National Council of La Raza, a Hispanic advocacy group, he talked about communities being “terrorized by ICE immigration raids.”

Lieberman said Napolitano “will be looking very closely at what ICE has done.”

• Weapons of mass destruction. A bipartisan commission created by Congress recently issued a chilling report predicting an attack using such a weapon is “more likely than not” in the next five years unless the international community acts.

The report concluded, “America’s margin of safety is shrinking.”

In a recent speech, current Homeland Security Secretary Michael Chertoff echoed those concerns, warning that “over the passage of time, the knowledge base that you need in order to fabricate a dirty bomb, a biological weapon or a chemical weapon – that knowledge base expands.”

• Civil liberties. The homeland security secretary must do everything possible to thwart terrorist threats while making sure domestic intelligence gathering doesn’t become too intrusive.

Obama’s decision to pick Leon Panetta to head the CIA signaled that he wants to take a softer approach to intelligence gathering than Bush, who drew fire for what critics called a trampling of civil liberties. Panetta was Clinton’s chief of staff and criticized the Bush administration’s use of torture in interrogating suspected terrorists.

• Cumbersome bureaucracy. The creation of the Homeland Security Department constituted one of the biggest government reorganizations in U.S. history, and its record has been mixed.

The Coast Guard, which is part of the department, won hero status for its daring helicopter rescues during Hurricane Katrina in New Orleans. The Federal Emergency Management Agency, also part of the agency, became the poster child for incompetence for its slow response to Katrina.

“Given where we are right now, the relationship between presidential personnel and government performance matters an enormous amount, more than ever, I would say,” said William Galston, a Brookings Institution fellow. “If you doubt the truth of that proposition, just cast your mind back three years to the government’s response to the disaster that hit New Orleans in the form of Hurricane Katrina.”